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American Homeownership Increases Again as Housing Market Looks for Balance

More Americans became homeowners in the summer months, fresh evidence of a housing market that’s finding some stability after several rocky years.

The national homeownership rate was 64.4% in the third quarter, the Census Bureau said Tuesday. That’s a half-percentage point higher than a year ago.

After touching an all-time high of 69.1% in 2004 as the housing bubble inflated, the homeownership rate bottomed out at 62.9% in 2016 as waves of Americans lost their homes or sold under duress. At the same time, many Americans who would ordinarily become buyers were locked out of the market by stringent lending rules, a lack of affordable inventory and a challenging economic backdrop.

All that has made the post-crisis housing market not just less accessible, but less dynamic. It’s possible the moderation in home prices over the course of 2018, which some analysts believe came from would-be buyers pushing back against hefty price gains, helped many of them finally become owners.

The homeownership rate can be controversial. Some analysts believe that government policies that helped enable ownership more broadly were responsible for the housing crisis, although many others believe there’s blame to go around.

Still, the meager recovery to this point puts the homeownership rate only back to 1995 levels, well before the run-up to the bubble. That suggests it may be possible for many more Americans to become owners, if housing market conditions ease further. The vacancy rate for owners was just 1.5% for the second month in a row, tighter than the 1.6% it averaged throughout 2017.